CIL e- auctions to get back to pre-Covid status in view of October auction’s success

Coal India (CIL’s) November onward auctions will be back to pre-Covid status, wherein the PSU miner’s subsidiaries will determine their own add-ons.

The decision came after gauging the response in the October auctions, where CIL introduced an add on of 10% over the notified price to test the market trends.

CIL brought down the reserve price for the auctions at the level of the notified price at the onset of the Covid-19 pandemic.

The October auctions has signalled stable auction sales and increased premiums in the ensuing months even after adding premium on the notified price to fix the reserve price, a top CIL executive said.

CIL’s e-auction sales at 16.8 million tonne (mt) in October was up 190% compared to 5.8 mt booked during October last fiscal.

The big jump was on the back of the power sector and other coal buyers, signalling a strong demand resumption after a Covid-led hiatus.

The October auctions fetched CIL an average13% increase over the notified price though special spot, which is a new auction outlet for coal importers,over the prevailing four windows chipped in 14% increase over the notified value, a CIL spokesperson said, adding under the special spot, a first time introduction meant for containing coal imports, 1.6 mt of coal was booked.

CIL’s special forward auction for the power sector, booked 6.5 mt in October, accounting for 38.7% of the total booked quantity.
This sector booked only 2 mt in September.

The power sector’s booking for the seven months ending October this fiscal, has been 16.5 mt compared to 12.9 mt booked during the same period last fiscal, a 28% increase.

Volume booking in e-auctions for the first seven months of the ongoing fiscal ending October at 59 mt, increased 28 mt, a growth by 90%, while it fetched an average premium of 10% over the notified price.

During April-October, non power sector consumers in exclusive e -auction, booked 16.8 mt against 4.8 mt it had booked during the same period last fiscal.

The importers’ and non power sector consumers’ volume bookings showed a healthy appetite since the unstructured coal market has no direct access for such category of consumers to purchase of coal, the CIL spokesperson said.